Marketing Plan analysis on Forever Living Products
This assignment will look at the existing marketing plan for the company Forever Living Products that focuses on the selling of aloe vera based products. The marketing plan will show how the company focuses on two areas – the consumer and the distributor. Both seem to be interlinked and both are important in the objective of the company. Furthermore, recommendations on shortfalls and lacking information will be made as to ensure that marketing is optimised and that this sales orientated company can improve on sales and profits.
2.Introduction and Background
Founded in 1978 on little more than dreams and hard work, Forever Living is a multi-billion dollar company, based in Scottsdale, Arizona, that manufactures and sells dozens of wellness and beauty products. People from all over the world, including South Africa, distribute these life-enhancing products, providing the opportunity to own an own business and secure a financial future with a proven plan. With over nine and a half million distributors in over 145 countries, Forever Living offers a once in a lifetime opportunity of living a healthier, wealthier life.
The founder proposed a very simple business idea to his closest family and friends over thirty years ago. Offer consumable products to the public that are proven to promote lasting wellness and health—and do it in a personal way. Instead of dumping big bucks into traditional advertising, compensate anyone willing to share these products with their family and friends.
In minimising traditional advertising, the company’s marketing plan was developed as seen in Addendum A . This marketing plan is very simple and focuses primarily on sales and promotion levels of sellers. Since 1978, very little changes were done to keep up with trends over the years.
Forever Living believes their greatest legacy is what they do for others and how they do it. “We adhere to sustainable practices that let us work in harmony with the earth, leaving a more promising future to our children. We take great pride in our charity foundation, Forever Giving, because it allows us to help others around the world who has needs far greater than our own. We are taking ideas and turning them into reality. It is a part of our business that’s so deeply ingrained you could call it our culture. Working towards a brighter future is so much more than our duty—it’s truly our pleasure.
Forever Living offers a unique opportunity where distributors are in business for themselves, but never by themselves.”
Seeing that the company primary focus is on sales, that is exactly what drives the objectives of the company. This is very clear in the current (unchanged) marketing plan still in use. The main objective is: Own your own business – You are in charge of your own destiny. Instead of making your boss rich, all the work you do actually benefits you. Thus, the company tries to empower ordinary people with the ability to own an income related to the amount of effort put into sales and marketing based on known and proven products and catering for people with the same values in life. A promotion scheme is followed where the distributor starts at entry level and then progress to higher levels determined by the amount of sales accomplished. It seems like primarily the focus is based on the total of sales obtained, but on the other hand a strong emphasis is placed on customer satisfaction.
Strengths – Being a company that has existed since 1978, it proves that this is no fly-by-night company. Sound records and proven results are in favour of establishing this company as a reputable business. Forever Living has a track record of more than 30 years of success.
The company offer excellent training, seminars, incentives, and a support center. Forever Living is a company with an international presence that demonstrates stability, growth, and ample industry experience. Innovative, quality products speak of the credibility of the company.
Weaknesses – Seeing that the Forever Living Company, on customer related issues, primarily makes use of word-of-mouth marketing, as well as drawing the majority of costumers from family and friends, it seems like this could lead to a potential gap in their marketing plan.
On the side of distributors, it seems like there is limited protocols and measurements regarding the amount of sale being monitored and available for scruitinising. Thus, it seems like whatever sales you submit per month is the only way of monitoring your own progress in the company.
Opportunities – Although it could also be seen as a stumbling block, Forever Living Products utilise the opportunity to play the ecological card (which seems to be quite popular in recent trends) and puts a great deal of emphasis on being “green” and sustainable. As quoted they are:
“- Accountable to the Environment
Ever since Forever Living Products was founded in 1978, we’ve had the utmost respect for nature.
– Not Just Greenwashing
Our challenge to be more eco-friendly wasn’t based on following fads or silencing critics. In 2006 we launched a formal environmental sustainability program to challenge ourselves to do more.
We designated two areas where we could improve:
* Waste Generation
* Waste Recovery
Since we began monitoring our progress we have reduced our waste by 50% and increased our recycling from 26% to 61%.
– Our Carbon Footprint
When it comes to the efficiency of converting CO2 into oxygen, 20 aloe plants are equal to one tree. With over 40 million aloe vera plants in our plantations, our Aloe Vera of America plantations actually cleanse the earth of 2 million tons of CO2 every year!” https://www.foreverliving.com/marketing/Page.do?name=sustainability
Threats – Looking at the global economy, this could be a factor in reduced sales as Forever Living Products might be costly for costumers in countries (third-world countries) that are struggling economically. Few competition threats in relation to the product itself are known of as aloe vera products are limited by resources (aloe plants mostly grow in arid/ desert areas). Also, the amount of aloe vera in the base product makes this product range unrivaled by most other products.
For consumers, the Forever Living Company’s product range is solely based on Aloe Vera products, which are divided into health drinks, nutritional supplements, weight management products and cosmetic / personal care products. This alone already gives the company a unique foothold on the health and beauty market – a fresh approach with a definitive product focus.
As for distributors, Forever Living also has the advantage of a multi-level “step-up” promotion scheme for distributors where you can reach a certain level and not “degrade” once you have reached that level.
With this being said, other advantages are:
Owning your own business – You are in charge of your own destiny. Instead of making your boss rich, all the work you do actually benefits you.
Little risk and no overhead costs – Traditional brick-and-mortar businesses cost tens of thousands of dollars to establish, not to mention a bank loan that will take you decades to repay. Starting your home-based business with Forever Living only costs you a few hundred dollars.
No salary cap – Corporate jobs limit your pay range based on a market standard. With Forever Living, there is no cap on how much you earn. The harder you work, the more money you make.
Residual Income – Perhaps the greatest benefit is that the multi-level marketing strategy offers lasting income. You as a distributor will always earn commissions on distributors you introduce to Forever Living, continually reaping the benefits of your hard work.
7a). Target Market
As the company’s unique product – aloe vera – is linked to many health and cosmetic benefits, it is a product that is sellable to virtually anyone. The target market is generally based on friends and/ or family buying from the distributor. This is not limited though to the above mentioned, but also includes people that have the urge or need to better their lives by living more healthy and doing so in reaching out to products (like Forever Living Products) that could sustain and/or improve that kind of living. Because of the relative high pricing linked to these products, one would classify the core target market as middle to high income groups. Being a sales orientated business, distributors are however expected to contact as many as potential “consumers” to sell to and build up enough credit points (as part of the sales plan) to earn their compensation/rewards. Although a fair deal of business comprise of new business, a large part of sustaining and re-enforcing selling targets is based on repetitive sales from previous customers.
The positioning basically rest on aforementioned health and cosmetic benefits – to improve your way of life. With few competitors supplying specifically (certified) aloe vera products (keeping in mind that at least 75% of the base product must comprise of aloe vera), Forever Living has created a niche market and a unique selling opportunity.
7c). Marketing Mix
Marketing to potential customers basically comprises of launch events, word-of-mouth and sample tests conducted in various environments suitable to potential customers. In this instance distributors seem to gather a group of people and thus present the products to various potential customers. This type of approach seem to work well in that people in numbers agreeing on an issue would more likely be proned to buying and thus push up the sale quota.
As for distributors, Forever Living Products provides them with a simple, proven cycle that guarantees your success. If the distributor and their team members follow the steps in this cycle, there is no limit to how large their business will become and how much money you will earn.
1. Purchase a Business Pak
2. Develop a personal selling/marketing plan
3. Set your foundation by retailing four case credits per month
4. Follow up with your clients and prospects
5. Present the business opportunity
6. Sponsor new team members and guide them through the cycle
Since the foundation in 1978, Forever Living Products markets extensively aloe vera based products. They pride themselves in claiming at least 75% of the base product consists of this core ingredient. Thus all products marketed are said to contribute to the health and cosmetic (e.g. skin care) satisfaction of their customers. Over the years, with the trend of energy drinks that became popular in recent years, the company made sure that the products offered also includes these trends. Focusing on a better living, the name Forever Living Products leans quite suitably towards what the company tries to “sell” – a longer, better, healthier life. The company also offers a full refund and/ or replacement of products without any disputes. What has been noted in delivery service is that customer service in this regard is very sufficient and fast – 2 days delivery since placing an order to delivery on your doorstep. ii)Place
Forever Living took a stance on the fact that they want to assist ordinary people to “own” their own businesses. As Forever Living Products markets primarily through the use of family and friends and word-of-mouth, it seems that there could be a gap in utilizing other means of distribution. However, it is also understandable that the company would like to empower distributors (without the necessity of holding a large stock reserve) and thus ensure that even the smallest distributor would be able to make a living. This would furthermore project the products as being more exclusive – not being able to walk into your nearest shop and pick it off the shelf, and in this way “justify” the price of the product.
The home company is situated in Arizona, United States. The South African setup with four distributor outlets services distributors all over South Africa.
As mentioned earlier, products are primarily marketed by means of word-of-mouth, friends and family. Other means of marketing and advertising includes internet advertisements and online testimonials. All of these are rather inexpensive marketing tools being utilised. Through these channels is seems that there is sufficient affirmation to uphold the reputation of the products offered. However, with these channels used it seems to be difficult to obtain a clear estimation of the effectiveness of these efforts.
On actual selling by distributors there is no clear indication of time spend, the only indication that could be used as a measure is the sum of “case credits”. Case credits determine the effective selling of a distributor. The more case credits accumulated during a month, the higher the incentives and possibility to progress to another level (often with even better incentives).
The company tries to keep their products “exclusive” and thus the use of database marketing seems ineffective, as this would make the products seem “common”.
In general, promotion of products for this company is based on testimonials from “regular consumers” who can recommend the benefits to others. Through this line of advertising, it would seem that benefits of the products are more creditable, true and trustworthy – due to the fact that you “know” the person who introduced you to the line of products.
Pricing on international products are generally seen as being expensive, especially on “niche” products. Even with Forever Living Products, this phenomenon occurs. However, focusing on health and cosmetic enhancements, the company can still make a reasonable stance in the pricing arena.
8.Implementation, Evaluation and Control
The marketing plan appears to be in line with the goals set out by the company to achieve the desired goals. Primarily the activities required are achieved through sales of the distributors, which is measured on a monthly basis. Most probably the company would need to attempt a fresh approach on current marketing strategies such as e-commerce, although this could affect the purpose of the current structure and “mission” of the company – to empower “normal people to own a business of their own”. Seeing that performance standards are basically measured in the amount of sales per month (to achieve the desired “case credits”, this is the only way to measure the above mentioned.
9. Conclusion / Recommendations
The Forever Living Products Company has set remarkable sales initiatives in place, rarely found in this type of marketing. For one, when a distributor has reached a certain sales level, there is no reverting back to a lower sales level. In every sale that is made down your line as distributor (no matter what level), you benefit from the inputs of “your team.
Although the company follows a very plain marketing plan, which seems to be quite effective, some improvements can be noted. Lack of information is found in the distributors’ channels. As the company’s main aim is based on sales, it could be recommended that an on-line “portal” be created as to inform distributors of a current sales analysis (as of the first of every month, and therefore should be accessible and reflect updates any time of the month). This would pose to be a great motivational tool in driving this sales orientated business and ensuring that you as distributor acquire the necessary “case credits” required.
It is also recommended that the use of social media such as e.g. television and radio, bill-boards and poster be used on a global and general scale to promote products. This would in turn mean that a central access point (like a website or telephone call centre be utilised to direct potential customers to their nearest distributor.
Forever Living Products South Africa (Pty) Ltd.(2014): https://www.foreverliving.com/marketing/Page.do?name=sustainability, [Accessed 29-04-2014]
Forever Living Products South Africa (Pty) Ltd.(2014):.https://www.foreverliving.com/marketing/Page.do?name=our_culture, [Accessed 29-04-2014]
http://aloe-business.yolasite.com/resources/Marketing_Plan_English%20Forever.pdf, [Accessed 28-04-2014]